Barrett v. TEMA DEVELOPMENT (1988), INC.

463 F. Supp. 2d 423, 2006 U.S. Dist. LEXIS 85208, 2006 WL 3345411
CourtDistrict Court, S.D. New York
DecidedNovember 15, 2006
Docket06 CIV. 0144(VM)
StatusPublished
Cited by13 cases

This text of 463 F. Supp. 2d 423 (Barrett v. TEMA DEVELOPMENT (1988), INC.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barrett v. TEMA DEVELOPMENT (1988), INC., 463 F. Supp. 2d 423, 2006 U.S. Dist. LEXIS 85208, 2006 WL 3345411 (S.D.N.Y. 2006).

Opinion

DECISION AND ORDER

MARRERO, District Judge.

Plaintiff Patrick Barrett (“Barrett”), a resident of New York, brought this action under the Court’s diversity of citizenship jurisdiction asserting breach of fiduciary duty and breach of contract claims against defendant Tema Development (1988), Inc. (“Tema”), a Delaware corporation with it principal place of business in Texas. Barrett’s claims arise out of his real estate business relationship with Wa’el Khoury (“Khoury”), the sole director of Tema, after February, 2002. Before the Court is Te'ma’s motion to dismiss Barrett’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal ju *425 risdiction. 1 For the reasons described below the motion is granted.

I. BACKGROUND 2

Barrett’s claims of breach of contract and breach of fiduciary duty assert that Tema breached the Investment Understanding Agreement, dated December 1, 2002 (the “IUA”), between the parties, under which Barrett was to seek out real estate investment opportunities for acquisition in the United States and Tema would provide the capital. As alleged in the complaint, on the verge of closing, Tema declined to pursue an investment opportunity, identified by Barrett, in a property located in Massachusetts called Great Woods. According to Barrett, Tema’s decision was unrelated to the business, legal or economic aspects of the deal. Thereafter, Tema terminated its participation in the IUA. (Id. ¶ 20.)

To pursue these claims, Barrett must first establish personal jurisdiction over Tema. Barrett alleges numerous facts which he argues justify the exercise of long-arm jurisdiction over Tema in New York pursuant to New York Civil Practice Law and Rules (“CPLR”) § 302(a)(1). First, Barrett states that he “had business dealings with Defendant Tema” through Delma Associates, LP, whose principal place of business is in New York. (ComplV 7.) After his employment with Delma Properties, Inc. ended, according to Barrett, he entered into an agreement with Tema, through Khoury, to jointly pursue future real estate investments. While negotiating the IUA Barrett, Khoury, and Khoury’s advisors “had conferences, both by telephone and in person.” (Id. ¶ 10.) Subsequently, Barrett and Khoury allegedly “met in New York ... and discussed the [agreement].” (Id. ¶ 13.) Additionally, Barrett and Tema retained the New York office of an international law firm in negotiating with the seller of a particular property and Tema paid the firm’s bills.

In his Memorandum of Law in Opposition to Tema’s Motion to Dismiss, Barrett'further alleges:

Defendant had numerous contacts and communications with Plaintiff in New York concerning the transactions at issues [sic] in this cáse. Includes [sic] were: telephone calls and emails to Mr. Barrett in New York, engagement of Paul Hastings law firm in New York (paid by Defendant), and bank accounts in Bank Audi in New York maintained by the Defendant,

(Plaintiffs Memorandum of Law in Opposition to the Motion to Dismiss, dated April 17, 2006 (“Pl.’s Opp’n”), at 5.)' 3

Barrett’s supporting declaration concedes that “[t]he [IUA] was prepared after *426 [Barrett] met with Wa’el Khoury and [his associate] in London” but adds that “[t]he final draft [of the IUA] was sent to [Barrett] in New York.” (Declaration of Patrick Barrett, dated April 17, 2006 (“Barrett Decl.”), ¶ 3.) The Declaration also states that “[i]n or about March, 2003, [Barrett] had a conversation with Mr. Khoury in person in New York concerning the [IUA] and potential real estate investments to be made pursuant thereto,” (id. ¶ 13), and that “[Barrett] had sustained contact with Mr. Khoury, [and his associates] all acting on behalf of [Tema] over the course of several months” (id. ¶ 14). Finally, Barrett’s Declaration contains additional facts about Bank Audi: “Bank Audi’s principal place of business is in New York, New York, and Mr. .Khoury serves on the board of directors. On information and belief, Mr. Khoury or his family has a beneficial interest in Bank Audi.” (Id. ¶ 5.)

Although it is not explicitly mentioned in the complaint, in Barrett’s response to Tema’s motion to dismiss, or in either of the supporting declarations, the Court also notes that the IUA, a copy of which is annexed to the complaint, contains a provision requiring Khoury to “request that Bank Audi take phone calls from prospective Sellers and indicate that Tema and/or its affiliates have sufficient capital in the bank to close a transaction should we decide to proceed.” (IUA, ¶ 6, attached to Compl. as Exhibit A.)

II. DISCUSSION

A. PERSONAL JURISDICTION

Barrett contends that this Court has personal jurisdiction over Tema because the “Defendant is subject to long-arm jurisdiction in this District.” (ComplJ4.) Barrett’s subsequent submissions specify CPLR § 302(a)(1) as the basis for this Court’s jurisdiction. Tema challenges personal jurisdiction over it on the grounds that in a somewhat related action between the parties, the New York State Supreme Court, affirmed by the Appellate Division, has already found personal jurisdiction over Tema lacking, and that Tema’s actions related to the alleged contract are not sufficient to establish jurisdiction. As a threshold matter, the Court notes that the “the amenability of a foreign corporation to suit in a federal court in a diversity action is determined in accordance with the law of the state where the court sits.” Arrowsmith v. United Press International, 320 F.2d 219, 223 (2d Cir. 1963)(en banc).

1. Preclusive Effect of State Court Jurisdiction Ruling

As discussed above, in the disposition of Barrett’s state court action .arising out of his partnership and employment relationships with Delma Associates and Delma Properties, the New York Supreme Court found personal jurisdiction over Tema lacking. (See Barrett v. Toroyan, No. 112012/04 (N.Y. Sup.Ct. June 29, 2005) at 5, attached as Exhibit 1 to Affidavit of Gail L. Gottehrer, Esq. in Support of Defendant’s Motion to Dismiss the Complaint, dated Mar. 7, 2006 (“Gottehrer Aff.”)) In that action, Barrett alleged that Tema, as well as other individual and insti *427 tutional defendants, had converted asset management fees. (Complaint in Barrett v. Toroyan, No. 112012/04 (N.Y.Sup.Ct.), dated Aug.

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Bluebook (online)
463 F. Supp. 2d 423, 2006 U.S. Dist. LEXIS 85208, 2006 WL 3345411, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barrett-v-tema-development-1988-inc-nysd-2006.